It has been another rough few weeks for CBD companies. Over the last few months we’ve seen a major uptick in class action lawsuit filings and regulatory warnings aimed at CBD brands and the last two weeks have been no different.
On November 25, the U.S. Food and Drug Administration (FDA) issued warning letters to 15 CBD companies for “illegally selling products containing cannabidiol (CBD) in ways that violate the Federal Food, Drug, and Cosmetic Act (FD&C Act).” In addition, two other CBD brands have been on the receiving end of new class action lawsuit filings – both in the U.S. District Court for the Central District of California.
The California suits have separately named Infinite Products Co. and Charlotte’s Web Holdings as defendants in two proposed class actions. Both suits allege similar causes of action against the companies, specifically, that the companies are marketing and selling their CBD-containing products in violation of federal regulations. The Charlotte’s Web suit alleges that the product purchased by the plaintiff in the case was illegally marketed as a dietary supplement while the suit against Infinite Products alleges that the company’s products are misleadingly labeled and illegal to sell because they are misbranded as drugs useful in the treatment of diseases like hepatitis, cancer and Tourette’s syndrome.
In the news release related to the warning letters (Infinite Products received a warning letter while Charlotte’s web did not), the FDA cites a number of issues with the marketing and sale of CBD products in interstate commerce that CBD brands should note, including:
- Some of the products are marketed for infants and children – a vulnerable population that may be at greater risk for adverse reactions due to differences in the ability to absorb, metabolize, distribute or excrete a substance such as CBD.
- Some of the products are foods to which CBD has been added. Under the FD&C Act, it is illegal to introduce into interstate commerce any human or animal food to which certain drug ingredients, such as CBD, have been added. In addition, the FDA is not aware of any basis to conclude that CBD is GRAS among qualified experts for its use in human or animal food. There also is no food additive regulation which authorizes the use of CBD as an ingredient in human food or animal food, and the agency is not aware of any other exemption from the food additive definition that would apply to CBD. CBD is therefore an unapproved food additive, and its use in human or animal food violates the FD&C Act for reasons that are independent of its status as a drug ingredient.
- Some of the products are marketed as dietary supplements. However, CBD products cannot be dietary supplements because they do not meet the definition of a dietary supplement under the FD&C Act.
- One product outlined in a warning letter to Apex Hemp Oil LLC is intended for food-producing animals. The agency remains concerned about the safety of human food products (e.g. meat, milk, and eggs) from animals that consume CBD, as there is a lack of data establishing safe CBD residue levels.
The FDA also took the opportunity afforded by the issuance of the warning letters to remark in its news release that “it cannot conclude that CBD is generally recognized as safe (GRAS) among qualified experts for its use in human or animal food.”
As the FDA continues to wrestle with the regulation of CBD, companies operating in the sector will continue to face uncertainty and see new legal exposures, both from the government and the private sector (most likely in the form of additional class action suits). The same warnings we’ve issued to CBD brands previously still apply—be particularly wary of labeling and marketing requirements and especially avoid claims related to the treatment or cure of any diseases.